Hello
A recent situation got me thinking about the implications of FATCA for those who have dual residency or citizenship. As I understand, the U.S. only becomes aware of a resident's foreign bank account in two ways:
1. The resident willingly discloses the account through self-reporting, i.e. the filing an FBAR with FINCEN, or disclosing on Form 8938.
2. The foreign jurisdiction identifies that the individual is a U.S. resident, and so submits the relevant report pursuant to their obligations under FATCA.
Assuming the non-US bank never becomes aware of an individual's US residency or citizenship, and said person does not self-report, it seems like the account would not be discovered.
Indeed, this should also work in reverse: if the dual national opens a bank account in the United States, it would appear the other country will not be informed the account exists. For example, in the case of a UK/US dual national, the relevant INA specifies that an account is reportable only if "the Account Holder is a resident of the United Kingdom", which would not be the case if they were residing in the US when the account was opened. In fact, if the account was opened with a US Social Security card and State-issued identification such as a driver's license, the bank would not even be aware of individual's dual nationality at all. If this person then moved back to their alternate country of residence, the relevant tax authority (in this case HMRC) would not be aware of the US account nor any deposits made into it. As far as I am aware the US will also never actively inform another country that one of their citizens has obtained US residency/citizenship, making this even harder to detect.
Obviously all interactions between such a person and their bank would have to be done in a way that won't suggest they have relocated, but this isn't hard these days.
Am I missing something?
A recent situation got me thinking about the implications of FATCA for those who have dual residency or citizenship. As I understand, the U.S. only becomes aware of a resident's foreign bank account in two ways:
1. The resident willingly discloses the account through self-reporting, i.e. the filing an FBAR with FINCEN, or disclosing on Form 8938.
2. The foreign jurisdiction identifies that the individual is a U.S. resident, and so submits the relevant report pursuant to their obligations under FATCA.
Assuming the non-US bank never becomes aware of an individual's US residency or citizenship, and said person does not self-report, it seems like the account would not be discovered.
Indeed, this should also work in reverse: if the dual national opens a bank account in the United States, it would appear the other country will not be informed the account exists. For example, in the case of a UK/US dual national, the relevant INA specifies that an account is reportable only if "the Account Holder is a resident of the United Kingdom", which would not be the case if they were residing in the US when the account was opened. In fact, if the account was opened with a US Social Security card and State-issued identification such as a driver's license, the bank would not even be aware of individual's dual nationality at all. If this person then moved back to their alternate country of residence, the relevant tax authority (in this case HMRC) would not be aware of the US account nor any deposits made into it. As far as I am aware the US will also never actively inform another country that one of their citizens has obtained US residency/citizenship, making this even harder to detect.
Obviously all interactions between such a person and their bank would have to be done in a way that won't suggest they have relocated, but this isn't hard these days.
Am I missing something?
